Blockchain networks, which can also be referred to as blockchain systems, consensus networks, distributed ledger system networks, or blockchain, enable participating entities to securely, and immutably store data. A blockchain can be described as a ledger system of transactions, and multiple copies of the ledger are stored across the blockchain network. Example types of blockchains can include public blockchains, permissioned blockchains and private blockchains. A public blockchain is open for all entities to use the blockchain, and participate in the consensus process. A permissioned blockchain is similar a public blockchain but open only for entities with permission to join. A private blockchain is provided for a particular entity, which centrally controls read, and write permissions.
Blockchains are used in crypto-currency networks, which enable participants to conduct transactions to buy/sell goods, and/or services using a crypto-currency. A common crypto-currency includes Bitcoin. In crypto-currency networks, record-keeping models are used to record transactions between users. Example record-keeping models include the unspent transaction output (UTXO) model, and the account balance model. In the UTXO model, each transaction spends output from prior transactions and generates new outputs that can be spent in subsequent transactions. A user's unspent transactions are tracked, and a balance that the user owns is calculated as the sum of all the user's unspent transactions. In the account balance model, each user's account balance is tracked as a global state. For each transaction, a balance of a spending account is checked to make sure it is larger than or equal to the transaction amount. This is comparable to traditional banking.
A blockchain ledger includes a series of blocks, each of which contains one or more transactions executed in the network. Each block can be analogized to a page of the ledger, while the blockchain itself is a full copy of the ledger. Individual transactions are confirmed and added to a block, which is added to the blockchain. Copies of the blockchain ledger are replicated across nodes of the network. In this manner, there is global consensus on the state of the blockchain. Further, the blockchain is open for all nodes to see, at least in the case of public networks. To protect privacy of blockchain users, encryption technologies can be implemented.
Under the account model, commitment schemes can be used to hide values that both parties of a transaction commit to. Commitment schemes can arise out of the need for parties to commit to a choice or value, and later communicate that value to the other parties involved. For example, in an interactive Pedersen Commitment, party A can commit to a transaction amount t by sending a commitment value PC(r, t) that is generated based on random value r. The commitment value is generated, and party B can only reveal the transaction amount t by obtaining the random number r.